Special Currency Basket valuation revised; authorised dealer banks must apply and notify constituents under FEMA directions.
The circular fixes the Rupee value of the Special Currency Basket at Rs. 83.137417 effective August 12, 2014, revising the earlier indicated value, and directs Authorised Dealer Category I banks to apply the revised valuation and notify their constituents; the Directions are issued under sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 and are without prejudice to other legal permissions or approvals.

Liberalised Remittance Scheme permits acquisition of immovable property abroad and withdraws related post facto reporting.
The Liberalised Remittance Scheme for resident individuals is clarified to permit use for acquisition of immovable property abroad, and the prior post facto reporting requirement applicable to such remittances is withdrawn; these directions are issued under the Foreign Exchange Management Act and remain subject to any other statutory permissions or approvals.

Information sharing with Special Investigation Team required from authorised persons, enabling investigations and resource facilitation under FEMA powers.
Authorised persons must ensure that information and documents required by the Special Investigation Team are made available as and when required; this direction is issued under Section 10(4) and Section 11(1) of the Foreign Exchange Management Act, 1999 and is without prejudice to permissions or approvals under any other law.

All-in-cost ceiling for external commercial borrowings continues under ECB policy, with other provisions remaining unchanged and reviewable.
The circular directs that the existing all-in-cost ceiling for External Commercial Borrowings remains applicable until December thirty-first, two thousand fourteen and will be reviewed thereafter; all other ECB policy provisions remain unchanged. Category I Authorized Dealer banks must notify their constituents and customers. The directions are issued under the Foreign Exchange Management Act, 1999 and do not affect other legal permissions or approvals.

All-in-cost ceiling for trade credits maintained, preserving existing import finance conditions pending review by RBI under FEMA.
The Reserve Bank of India has directed that the existing all-in-cost ceiling for Trade Credits for imports into India will continue to be applicable until further review, with all other aspects of Trade Credit policy remaining unchanged; AD Category-I banks must inform constituents, and the directions are issued under Sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999.

FETERS reporting requirements: discontinue ENC and schedule files; submit only BOP6 and QE files from September.
Authorised Dealer banks must stop submitting ENC and Schedule 3-6 files to FETERS from the first fortnight of September 2014 because EDPMS will provide that information. AD banks must report all ENC and Schedule 3-6 transaction data for export shipping bills/invoices generated prior to March 1, 2014 by August 31, 2014, with late submissions allowed only with RBI technical support. From that September period, only the BOP6 and QE files are required under FETERS, and all other FETERS submission guidelines remain in force. Directions are issued under FEMA.

Prepaid foreign currency cards must be sold with equivalent due diligence and KYC standards as other foreign currency instruments.
Prepaid foreign currency cards are a form of foreign currency and authorised dealers/FFMCs selling prepaid foreign currency cards for travel purposes are required to comply with the same rigorous standards of due diligence and KYC as they would in case they were selling foreign currency notes/travellers cheques to their customers.

Foreign investment in government securities adjusted; FII/QFI/FPI allocations now require new purchases of bonds with minimum three-year residual maturity.
RBI reallocated part of the foreign investment limit for SEBI-registered investors by increasing the allocation to FIIs/QFIs/FPIs while reducing the sub-limit for long term SEBI-registered investors. The incremental allocation and any future investments made from the vacated limit must be placed in government bonds with a minimum residual maturity of three years. There is no lock-in and existing securities may be sold to domestic investors. SEBI will issue operational guidelines and AD Category I banks must inform constituents; other investment conditions remain unchanged.

Line of Credit conditions for export financing to Senegal require majority Indian content and set LC/disbursement timelines and compliance rules.
A Line of Credit from Exim Bank to the Government of Senegal finances eligible Indian goods, machinery, equipment and consultancy services for meat processing and related projects; a majority of contract value must be supplied from India with the balance allowable from outside. The Agreement effective date sets different cut offs for opening Letters of Credit and disbursements for project versus supply contracts. Shipments must be declared on GR/SDF forms. No agency commission is payable under the LOC; exporters may use own funds or EEFC balances for commission remittances subject to AD bank approval and prevailing instructions. Directions are issued under FEMA.

Project export approvals broadened: authorised banks may grant post award clearances without monetary limits under revised PEM guidance.
Reserve Bank revised project and service export procedures allowing Authorised Dealers and Exim Bank to grant post award approvals without monetary limits, eliminating the Working Group requirement and removing the mandatory time limit for submission of post award approval forms; the revised PEM prescribes procedural safeguards, monitoring, reporting, security and facility conditions and confirms continued applicability of FEMA rules and ECGC/Exim Bank participation requirements.

e-Aadhaar e-KYC acceptance as Officially Valid Document enables paperless KYC verification for money transfer service agents.
Recognition of Aadhaar-based electronic verification, including e-KYC outputs and e-Aadhaar downloads, as valid customer identification for Indian agents under the Money Transfer Service Scheme. e-KYC data provided electronically by UIDAI upon explicit consent and biometric authentication may be treated as an Officially Valid Document for KYC under PML Rules. Indian agents must sign a KYC User Agency agreement, deploy certified biometric scanners and UIDAI-compliant software, secure transmission and encryption of Aadhaar and biometric data, and maintain a complete audit trail.

Accepting e-KYC as an Officially Valid Document enables paperless KYC with biometric authentication for identity and address verification.
Authorised Persons may accept physical Aadhaar or UIDAI e-KYC outputs as an Officially Valid Document for identity and, where address matches, for address verification. Use of UIDAI e-KYC requires the individual's explicit consent, biometric authentication, a KYC User Agency agreement with UIDAI, deployment of certified biometric scanners and UIDAI compliant software, and capture of the digitally signed, encrypted demographic data and photograph with a full audit trail. e-Aadhaar downloaded from UIDAI may be printed from the portal or authenticated by UIDAI services as prescribed.

Delegation of MTSS application processing to regional offices shifts Indian Agent permission filings to local Reserve Bank offices.
Applications for permission to act as Indian Agents under the Money Transfer Service Scheme must henceforth be submitted to the respective Regional Office of the Foreign Exchange Department that has jurisdiction over the applicant's registered office; all other MTSS instructions remain unchanged. The circular requires Authorised Persons to inform their constituents and states the directions are issued under the authority of the Foreign Exchange Management Act without prejudice to other legal permissions.

Rupee Drawing Arrangement approvals delegated to Regional Offices; AD Cat I banks must submit applications and annual review notes to ROs.
Regional Offices of the Reserve Bank are authorised to grant first time permissions for AD Cat I banks to enter into Rupee Drawing Arrangement (RDA) with non resident exchange houses; AD Cat I banks must submit the prescribed application to the Regional Office with jurisdiction over their registered office, may thereafter enter into RDAs subject to prescribed guidelines and must inform that Regional Office immediately. AD Cat I banks must also submit the Board approved annual review note on vostro accounts under RDAs by 30 June each year to the same Regional Office.

Foreign Direct Investment reporting: use NIC 2008 codes in FC GPR and FCTRS and include updated state/district codes.
Indian companies must classify activities using the National Industrial Classification 2008 and record NIC 2008 codes in Form FC-GPR for issues of shares and related instruments and in Form FCTRS for transfers; a uniform State and District code list for inclusion in Form FC-GPR is available on the Reserve Bank website, and Authorised Dealer Category I banks should inform their constituents.

Liberalised Remittance Scheme limit increase permits larger annual individual remittances and allows purchase of property abroad.
The Liberalised Remittance Scheme ceiling for resident individuals has been increased to a higher annual limit, authorising AD Category I banks to remit up to that revised ceiling per financial year for permitted current or capital account transactions or a combination thereof; the Scheme is explicitly permitted for acquisition of immovable property outside India and all other existing terms and conditions of prior circulars remain applicable.

FDI pricing guidelines revised: listed follow SEBI pricing, unlisted require internationally accepted arm's length valuation for exit.
For listed companies, issuance and transfer of equity and compulsorily convertible instruments shall follow SEBI pricing norms and optionality exits permit market price exit subject to lock in without assured return. For unlisted companies, issuance and transfer of equity and compulsorily convertible instruments must be priced on an arm's length basis using any internationally accepted pricing methodology, certified by a chartered accountant or SEBI registered merchant banker, ensuring no assured exit price and exit at a fair price subject to lock in. Companies must disclose valuation details, methodology and certifying agency in the financial year of the transaction.

Partly paid shares and warrants permitted as FDI/FPI subject to upfront payment, prescribed pricing, reporting and compliance conditions.
Partly paid equity shares and warrants issued by Indian companies qualify as FDI/FPI instruments subject to FDI/FPI scheme compliance. Issuances must determine pricing and receive an upfront portion of consideration, with balance received within prescribed timelines or monitored by an appointed agency for larger issues. Warrants require an upfront price/conversion formula and conversion price not below fair value. Reporting of each remittance and issuance/transfer is required via Advance Reporting Form, FIRCs, KYC, FC GPR, FC TRS and LEC as applicable. Investee companies and investors must comply with entry routes, sectoral caps, limits and any prior approval requirements.

Security manual for defence licences replaces affidavit requirement and becomes operative guidance for pre production security compliance.
Industrial licences for defence production had required an affidavit committing to implement safety, security and auditing procedures and to follow defence security recommendations; the Department of Defence Production has finalized and published a Security Manual for Licensed Defence Industry, and applicants are no longer required to submit that affidavit, with the manual serving as the operative guidance for pre production security compliance.

Clean Credit for diamond imports permitted with extended repayment period under FEMA; AD banks must ensure KYC and AML compliance.
Permission is granted for Clean Credit financing for import of rough, cut and polished diamonds, allowing foreign suppliers to extend credit to Indian buyers without Letters of Credit, Letters of Undertaking or Indian bank fixed deposits for a period not exceeding 180 days from the date of shipment; AD Category - I banks must conduct due diligence and comply with Reserve Bank KYC and AML standards and scrutinise large or abnormal transaction increases.